Kerala to accept Centre’s ₹817.80 crore VGF fund for Vizhinjam port

Thiruvananthapuram: The Kerala government has decided to accept the central government's Viability Gap Funding (VGF) share of Rs 817.80 crore for the Vizhinjam International Port project. The decision was made during a state cabinet meeting chaired by Chief Minister Pinarayi Vijayan on Thursday.

According to a statement from the Chief Minister's Office (CMO), the Centre has imposed a condition that the state must repay the amount under the Net Present Value (NPV) model. The Kerala government had earlier requested the Union government to release the VGF share without conditions, but this was rejected. The Centre maintained that the Vizhinjam project could not be compared to the Outer Harbour Container project at Tuticorin Port, which had received central funding.

Chief Minister Vijayan had previously written to Finance Minister Nirmala Sitharaman in October last year, urging the Centre to release the funds without the repayment clause. He argued that the condition imposed by the Department of Economic Affairs' Empowered Committee would place a financial burden of Rs 10,000 to Rs 12,000 crore on the state. He also pointed out that the Outer Harbour project at Tuticorin Port, which follows a similar financial structure to the Vizhinjam Seaport, was not subjected to the same repayment condition.

With PTI inputs